Student Savings Account Comparison
Opening a student savings account is important, but you will need to compare the different types of student accounts as well as the interest rates paid and any restrictions or limits in place. You will also need to consider any fees charged for the account. If the goal of the account is college, than a 529 college savings plan may be a better choice than a traditional savings account. These plans allow you to save money to meet college expenses and have a number of benefits. There are many banks including online institutions that offer reasonable interest rates on student savings account, but each will vary so research is needed to get the best rate possible on your savings balance.
Child savings account taxes can be a concern, but usually this can be avoided if college savings are the goal because a Coverdell Education Fund savings account and a 529 college plan do not have any tax on the interest paid, as long as the funds stay in the account or are used for educational purposes. Opening a student savings account online allows you and your child easy and convenient access, and the best savings account interest rates are typically seen with online accounts because these institutions do not have the expense of a physical location.
There are a number of student savings account types, and each one should be closely examined and evaluated. The benefits and disadvantages of each type should be compared, so that the right account type is chosen. A savings account calculator can help you determine the right amount to put in the account each week or month, so that meeting the financial or college goals for the student is easy and does not constitute any hardship. Some of these accounts have limits, such as no withdrawals or only a few withdrawals each year, and some may charge account fees but others offer students access to an account free of charge.